Thursday, 29 July 2010 - Market Commentary
:: United States Dollar: The Pound continued to rise against the Greenback yesterday. Cable saw an early rally Wednesday morning when stops tripped through 1.5600 taking the currency pair to a UK session high of 1.5626. BoE Miles and King made comments yesterday that dampened the recent positive sentiment surrounding the UK's economic recovery and this brought Pound temporarily lower against the Greenback, but a more positive view from Sentance dragged the Pound higher again. The US session once again had less than positive data with durable goods orders falling and the beige book showing that most districts continued recovery, but growth slowed in some areas. Shortly after the beige book, Governor Schwarzenegger declared a fiscal emergency in California - not good. Cable saw little movement overnight as it continuing to hover above 1.5600, but Nationwide UK house prices coming in worse than expected this morning keeps the Pound away from recent highs versus the US Dollar. GBP/USD opens at 1.5617.
- We expect a range today in the GBP/USD rate of 1.5530 to 1.5690
:: Euro: The single currency mirrors Pounds gains against the US Dollar. A choppy day for the currency pair saw the Euro dip above and below the big figure 1.3000. Resistance around 1.3040 / 1.3050 sees any positive gains to break these figures are followed by a shallow fall off. The range remains reasonably tight with the pair seeing lows around 1.2975 and highs of 1.3040. This range has been broken this morning though and EUR/USD opens this morning at 1.3060 - on the move upwards. It is the same old story with the Pound versus the Euro. Despite the odd jump or fall of around 30 pips the currency pair has traded around 1.2000 for the majority of yesterday’s session. Poor UK house prices data this morning sees the pair open at 1.1975.
- We expect a range today in the GBP/EUR rate of 1.1920 to 1.2060
:: Aussie and Kiwi Dollars: As the Aussie rises, the Kiwi falls against the US Dollar this morning. The Australian Dollar fell Tuesday after it was announced that growth unexpected slowed in the second quarter. The US sessions lack of positive data also hasn’t helped the currency pair and a fall closer to 0.8900 was seen. It seems that month end Aussie demand is helping the gains early this morning and AUD/USD currently sits back up at 0.9015. NZD/USD is another story and since interest rates were hiked 0.25 bps last night by the RBNZ the Kiwi has dipped. Dovish comments from Governor Bollard following the interest rate announcement the main reason for the fall as future rate hikes are likely to be more moderate going forward. The NZD has been on the rise since and currently sits at 0.7264 versus the Greenback. Sterling has fallen off against the Aussie and gained on the Kiwi due to this and GBP/AUD opens today’s session at 1.7333 and GBP/NZD 2.1518.
- We expect a range today in the GBP/AUD rate of 1.7210 to 1.7480
- We expect a range today in the GBP/NZD rate of 2.1290 to 2.1600
:: Data Releases:
- AUD: Private Sector Credit m/m
- EUR: German Unemployment Change
- GBP: Nationwide HPI m/m, Net Lending to Individuals m/m, GfK Consumer Confidence
- NZD: Building Consents m/m
- USD: Unemployment Claims
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